Allgon Interim Report January 1 - June 30 2001.BUSINESS EDITORS STOCKHOLM Stockholm (stŏk`hôlm'), city (1995 pop. 692,954), capital of Sweden and of Stockholm co., E Sweden, situated where Lake Mälaren flows into the Baltic Sea. , Sweden--(BUSINESS WIRE)--July 13, 2001 Allgon AB -- Net sales decreased to SEK 1,038M (1,314). The fall is mainly attributable to lower sales of mobile telephone antennas. -- Operating income fell to SEK -80M (55). -- The capital gain on the sale of Wireless Solutions amounted to SEK 109M. -- Costs of a one-off nature amounted to SEK 64M in the second quarter. -- Continued success for Allgon's repeaters and coverage solutions. -- Launch of antennas and repeaters for UMTS during the second quarter. -- Production unit for mobile telephone antennas being set up in China. Market Following a very strong growth of the infrastructure market for mobile telephony Meaning "sound over distance," it refers to electronically transmitting the human voice. In the beginning, telephony dealt only with analog signals in the circuit-switched networks of the telephone companies. in 2000, the first six months of 2001 were characterized char·ac·ter·ize tr.v. character·ized, character·iz·ing, character·iz·es 1. To describe the qualities or peculiarities of: characterized the warden as ruthless. 2. by a global slow-down. The previous year's expansion has created a capacity in many networks which has been sufficient to cover a large proportion of the growth in subscribers. Sales of mobile telephones in 2001 are estimated at just under 400 million telephones, i.e. slightly less than last year. Considering the build-up build·up also build-up n. 1. The act or process of amassing or increasing: a military buildup; a buildup of tension during the strike. 2. of inventories, which took place before the turn of the year, Allgon's assessment is that the production of mobile telephones is significantly below the number of sold telephones. As previous evaluations of the market were in the range of 550 million telephones, there is a significant overcapacity o·ver·ca·pac·i·ty n. Too great a capacity for production of commodities or delivery of services in relation to actual need: the problem of overcapacity in many large industries. in the sector. Second quarter 2001 During the second quarter, Allgon's net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight amounted to SEK SEK In currencies, this is the abbreviation for the Swedish Krona. Notes: The currency market, also known as the Foreign Exchange market, is the largest financial market in the world, with a daily average volume of over US $1 trillion. 519M (632) which was on a par with the first quarter. Operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. amounted to SEK -6M (33) and income after financial items to SEK -13M (14). The divestment divestment to strip one's investment from an entity. of Wireless Solutions generated a capital gain of SEK 109M. Costs of a one-off (1) One at a time. CD-ROM recorders (CD-R drives) are commonly called one-off machines because they write one CD-ROM at a time. (2) Only once. Software that is written to solve a specific problem only one time is sometimes called a one-off. nature amount to SEK 64M, of which SEK 45M is attributed to write-down Write-Down Reducing the book value of an asset because it is overvalued compared to the market value. Notes: This is usually reflected in the company's income statement as an expense, thereby reducing net income. of inventories. The write-down is mainly caused by a changed product mix and falling demand. Other costs of a one-off nature are mainly attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to the decision to move the manufacturing of mobile telephone antennas in the USA to Sweden Sweden, Swed. Sverige, officially Kingdom of Sweden, constitutional monarchy (2005 est. pop. 9,002,000), 173,648 sq mi (449,750 sq km), N Europe, occupying the eastern part of the Scandinavian peninsula. . During the second quarter of 2000, items affecting comparability amounted to SEK 44M. Group net sales and orders received Net sales during the first half of the year fell to SEK 1,038M (1,314) and orders received to SEK 1,043M (1,276). Allgon Systems Net sales fell to SEK 695M (765) and operating income to SEK -79 (67). Operating income includes costs of a one-off nature of SEK 51 (-), of which SEK 45M related to write-down of inventories. The market in North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. has been weak whereas Asia and, especially, China has developed positively during the second quarter. The success of repeaters and coverage solutions has continued and a number of large orders were received. During the second quarter, Allgon Systems launched antennas and repeaters for UMTS (Universal Mobile Telecommunications System) The GSM implementation of the 3G wireless phone system. Part of IMT-2000, UMTS provides service in the 2 GHz band and offers global roaming and personalized features. and additional UMTS products will be launched during the second half of the year. A cost savings program, implemented in the first half of the year, started to make an impact in the second quarter. Allgon Mobile Communications Net sales fell to SEK 286M (501) and operating income to SEK -36M (58). SEK 31M of the decrease in net sales is attributable to operations which were divested during 2000. Operating income includes one-off costs of SEK -29M (29), of which the majority is attributable to the decision to move the production in the USA to Sweden during the summer. In the first six months of the year, the sales volume amounted to 34 million antennas, of which 30 (1) percent consisted of built-in built-in - (Or "primitive") A built-in function or operator is one provided by the lowest level of a language implementation. This usually means it is not possible (or efficient) to express it in the language itself. antennas. During the remainder of the year, the proportion of built-in antennas is expected to increase significantly. In the first quarter, an additional program was implemented aimed at reducing the business area's fixed expenses. This made an impact during the second quarter. A production unit is under construction in China and will be in operation at the beginning of 2002. Allgon Microwave microwave, electromagnetic wave having a frequency range from 1,000 megahertz (MHz) to 300,000 MHz, corresponding to a wavelength range from 300 mm (about 12 in.) to 1 mm (about 0.04 in.). Like light waves, microwaves travel essentially in straight lines. Net sales fell to SEK 36M (46) and operating income to SEK -33M (-24). The marketing activities were focused on European European emanating from or pertaining to Europe. European bat lyssavirus see lyssavirus. European beech tree fagussylvaticus. European blastomycosis see cryptococcosis. UMTS operators. Allgon Microwave is currently involved in negotiations with a number of these operators. In addition to the mobile operator segment, negotiations are underway with customers, both in Europe Europe (y  r`əp), 6th largest continent, c.4,000,000 sq mi (10,360,000 sq km) including adjacent islands (1992 est. pop. 512,000,000). and Asia,
relating to relating to relate prep → concernantrelating to relate prep → bezüglich +gen, mit Bezug auf +acc microwave based data communication solutions to public companies and public administration. The projects within this segment have increased recently and this is expected to generate results during the second half of the year. Allgon Microwave has a strong product portfolio which is well- adapted for the above mentioned segments. Wireless Solutions Net sales increased to SEK 21M (2) and operating income improved to SEK -19M (-28). The business area was divested during the second quarter and has been consolidated con·sol·i·date v. con·sol·i·dat·ed, con·sol·i·dat·ing, con·sol·i·dates v.tr. 1. To unite into one system or whole; combine: until May inclusive (theory) inclusive - In domain theory, a predicate P : D -> Bool is inclusive iff For any chain C, a subset of D, and for all c in C, P(c) => P(lub C) In other words, if the predicate holds for all elements of an increasing sequence then it holds for their least upper . Consolidated results Allgon's gross margin fell despite the stronger USD USD In currencies, this is the abbreviation for the U.S. Dollar. Notes: The currency market, also known as the Foreign Exchange market, is the largest financial market in the world, with a daily average volume of over US $1 trillion. . This is mainly due to the declining market and overcapacity. In addition, the gross margin is charged with one-off costs in connection with production rationalization rationalization, in psychology: see defense mechanism. and the write-down of inventories. Allgon's operating income fell to SEK -80M (55) and operating income after financial items to SEK -92M (30). The result includes costs of a one-off nature totaling SEK - 83M (0). Income after financial items includes, as an item affecting comparability, the sale of Wireless Solutions with SEK 109M (44). Income after financial items would have been SEK 77M (19) higher if Allgon had not had any currency-hedging. At the period-end, there were forward contracts, which have not yet expired ex·pire v. ex·pired, ex·pir·ing, ex·pires v.intr. 1. To come to an end; terminate: My membership in the club has expired. 2. , amounting to USD 15M subscribed Subscribed Newly issued securities that an investor has agree to, or stated his intent to, buy in a public offering prior to the issue date. When an investor uses rights, he expects to own the designated number of shares they have subscribed to once the offering is completed. at an average call rate of SEK 9.94. Financial position At June June: see month. 30, 2001, the equity ratio amounted to 39 percent (December December: see month. 31, 2000: 42 percent). Net borrowing amounted to SEK 215M at the period-end (December 31, 2000: SEK 370M). Capital expenditure During the period, capital expenditure in buildings and land, and machinery and equipment amounted to SEK 71M (136) gross, of which the completion of the building in T[SIGMA]by, Sweden, accounted for SEK 64M during the first half of the year 2000. Parent company Operations in the parent company, Allgon AB (publ) consist exclusively of Group co-ordination tasks and assets consist mainly of shares in subsidiaries. Accounting and valuation principles The same accounting principles and calculation methods have been applied as in the latest Annual Report. This Interim Report has not been the subject of special examination by Allgon's Auditors AUDITORS, practice. Persons lawfully appointed to examine and digest accounts referred to them, take down the evidence in writing, which may be lawfully offered in relation to such accounts, and prepare materials on which a decree or judgment may be made; and to report the whole, together . Future information dates October October: see month. 16, 2001 Nine-month Interim Report
Condensed Consolidated 2001 2000 Jul 2000
2000 -
Statement of Income (SEK million) Jan-Jun Jan-Jun Jun Jan-Dec
2001
Net sales 1,038 1,314 2,420 2,696
Cost of goods sold -799 -879 -1,734 -1,814
Gross income 239 435 686 882
Selling expenses -131 -149 -280 -298
Administrative expenses -62 -84 -145 -167
Research and development costs -187 -182 -381 -376
Other operating income/expenses -48 -9 -53 -14
Items affecting comparability 109 44 95 30
Operating income -80 55 -78 57
Net financial income/expenses -12 -25 -17 -30
Income after financial items -92 30 -95 27
Taxes 12 -10 8 -14
Minority interests of net income -2 -2 -3 -3
for the period
Net income for the period -82 18 -90 10
Earnings per share (SEK) -2.82 0.63 -3.10 0.35
Number of shares at period-end 29,266 29,183 29,266 29,266
(000)
Average number of shares (000) 29,266 29,129 29,255 29,192
Condensed Consolidated 2001 2000 Jul 2000
2000 -
Balance Sheet (SEK million) Jun 30 Jun 30 Jun Dec 31
2001
Assets
Fixed assets 502 553 502 570
Current assets 1,150 906 1,150 1,096
Total assets 1,652 1,459 1,652 1,666
Equity and liabilities
Shareholders- equity 633 687 633 693
Minority interests 6 4 6 4
Provisions 144 60 144 76
Long-term liabilities 226 207 226 214
Current liabilities 643 501 643 679
Total equity and liabilities 1,652 1,459 1,652 1,666
2001 2000 Jul 2000
2000 -
Cash flow analysis (SEK million) Jan-Jun Jan-Jun Jun Jan-Dec
2001
Cash flow from current operations -113 84 -101 96
Change in working capital 72 -21 -40 -133
Capital expenditure, net 1) 162 -124 186 -100
Cash flow after investments 121 -61 45 -137
Financing -57 49 44 150
Change in liquid funds 64 -12 89 13
1) SEK 227 M relate to the
divestment of Wireless Solutions
Sweden AB
2001 2000 Jul 2000
2000 -
Key figures Jan-Jun Jan-Jun Jun Jan-
2001 Dec
Orders received (SEK million) 1,043 1,276 2,201 2,434
Operating margin (%) -8 4 -3 2
Profit margin (%) -8 2 -4 0
Return on operating capital -17 12 -9 6
(%)
Return on capital employed (%) -8 16 -4 10
Return on shareholders- equity -25 5 -14 1
(%)
Equity ratio (%) 39 47 39 42
Interest-bearing liability 376 291 376 440
(SEK million)
Average number of full-time 1,209 1,233 1,275 1,268
employees
Capital expenditures for:
- buildings and land (SEK 1 66 -29 36
million)
- machinery and equipment 70 70 166 166
(SEK million)
Depreciation/Amortization (SEK -60 -56 -126 -122
million)
Equity per share (SEK) 22 24 22 24
Net sales distributed by 2001 2000 Jul 2000
2000 -
geographical markets (SEK Jan-Jun Jan-Jun Jun Jan-
million) 2001 Dec
Europe 246 320 552 626
North & South America 603 751 1,399 1,547
Rest of world 189 243 469 523
Total 1,038 1,314 2,420 2,696
Net sales distributed by 2001 2000 Jul 2000
2000 -
Business Areas (SEK million) Jan-Jun Jan-Jun Jun Jan-
2001 Dec
Systems 695 765 1,633 1,703
Mobile Communications 286 501 655 870
Microwave 36 46 102 112
Wireless Solutions 21 2 30 11
Total 1,038 1,314 2,420 2,696
Operating income distributed 2001 2000 Jul 2000
by 2000 -
Business Areas (SEK million) Jan-Jun Jan-Jun Jun Jan-
2001 Dec
Systems -79 67 52 198
Mobile Communications -36 58 -49 45 1)
Microwave -33 -24 -54 -45
Wireless Solutions -19 -28 -67 -76
Total -167 73 -118 122
Common Group items 94 4) 53 -52 2),3)
-11
Goodwill amortization -7 -7 -13 -13
Operating income -80 55 -78 57
1) Includes capital gain on
divestment of the vehicle
antenna operation of SEK 28 M
2) Includes surplus funds from
SPP of SEK 30 M
3) Includes costs attributable
to the offer situation of SEK
-28 M
4) Includes capital gain on
divestment of the business
area Wireless Solutions of SEK
109 M
QUARTERLY FIGURES
Condensed Consolidated 2001 2001 2000 2000 2000 2000
Statement of Income (SEK Apr-Jun Jan-Mar Oct-Dec Jul- Apr- Jan-
million) Sep Jun Mar
Net sales 519 519 710 672 632 682
Cost of goods sold -424 -375 -466 -469 -427 -452
Gross income 95 144 244 203 205 230
Selling expenses -64 -67 -83 -66 -74 -75
Administrative expenses -25 -37 -45 -38 -48 -36
Research and development -87 -100 -104 -90 -91 -91
costs
Other operating -34 -14 3 -8 -3 -6
income/expenses
Items affecting 109 - -29 15 44 -
comparability
Operating income -6 -74 -14 16 33 22
Net financial -7 -5 -7 2 -19 -6
income/expenses
Income after financial items -13 -79 -21 18 14 16
Taxes 16 -4 0 -4 -5 -5
Minority interests of net -2 -1 -1 0 -1 -1
income for the quarter
Net income for the quarter 1 -84 -22 14 8 10
Earnings per share (SEK) 0.05 -2.86 -0.73 0.45 0.29 0.34
Number of shares at period- 29,266 29,266 29,266 29,266 29,183 29,183
end (000)
Average number of shares 29,266 29,266 29,266 29,245 29,183 29,088
(000)
Condensed Consolidated
Balance Sheet (SEK million) 2001 2001 2000 2000 2000 2000
Assets Jun 30 Mar 31 Dec 31 Sep 30 Jun 30 Mar 31
Fixed assets 502 596 570 598 553 558
Current assets 1,150 1,040 1,096 1,018 906 946
Total assets 1,652 1,636 1,666 1,616 1,459 1,504
Equity and liabilities
Shareholders- equity 633 616 693 712 687 678
Minority interests 6 5 4 3 4 3
Provisions 144 83 76 55 60 58
Long-term liabilities 226 221 214 213 207 208
Current liabilities 643 711 679 630 501 557
Total equity and liabilities 1,652 1,636 1,666 1,616 1,459 1,504
2001 2001 2000 2000 2000 2000
Key figures Apr-Jun Jan-Mar Oct-Dec Jul- Apr- Jan-
Sep Jun Mar
Orders received (SEK 479 564 547 611 675 601
million)
Operating margin (%) -1 -14 -2 2 5 3
Profit margin (%) 0 -16 -3 2 1 2
Equity ratio (%) 39 38 42 44 47 45
Interest-bearing liability 376 448 440 359 291 335
(SEK million)
Average number of full-time 1,159 1,259 1,277 1,329 1,267 1,199
employees
Capital expenditures for:
- buildings and land (SEK 1 - -31 0 11 55
million)
- machinery and equipment 23 47 57 40 31 39
(SEK million)
Depreciation/Amortization -28 -32 -33 -33 -28 -28
(SEK million)
Equity per share (SEK) 22 21 24 24 24 23
Net sales distributed by 2001 2001 2000 2000 2000 2000
geographical markets (SEK Apr-Jun Jan-Mar Oct-Dec Jul- Apr- Jan-
million) Sep Jun Mar
Europe 104 142 157 149 151 169
North & South America 305 298 390 406 363 388
Rest of world 110 79 163 117 118 125
Total 519 519 710 672 632 682
Net sales distributed by 2001 2001 2000 2000 2000 2000
Business Areas (SEK million) Apr-Jun Jan-Mar Oct-Dec Jul- Apr- Jan-
Sep Jun Mar
Systems 370 325 476 462 384 381
Mobile Communications 133 153 196 173 224 277
Microwave 14 22 32 34 22 24
Wireless Solutions 2 19 6 3 -2 -
Total 519 519 710 672 632 682
Operating income distributed 2001 2001 2000 2000 2000 2000
by
Business Areas (SEK million) Apr-Jun Jan-Mar Oct-Dec Jul- Apr- Jan-
Sep Jun Mar
Systems -60 -19 56 75 35 32
Mobile Communications -21 -15 16 -29 31 27
Microwave -18 -15 -12 -9 -12 -12
Wireless Solutions -8 -11 -26 -22 -17 -11
Total -107 -60 34 15 37 36
Common Group items 104 -10 -45 4 0 -11
Goodwill amortization -3 -4 -3 -3 -4 -3
Operating income -6 -74 -14 16 33 22
Notes
2001 2000
Change in equity (SEK Jan-Jun Jan-Jun
million)
Opening balance as per 693 694
December 31
Change in translation 22 0
difference
Dividend - -25
Net income for the quarter -82 18
Closing balance according to
balance sheet as per June 30 633 687
Taxes
A deferred tax receivable
relating to estimated
deductible losses in Sweden
has been accounted
for from the second quarter
of 2001. The receivable
amounts to SEK 20 M.
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